Author: stella@footprint.network

Data Source: Blockchain Game Research Page - Footprint Analytics

In February 2024, the blockchain gaming sector achieved significant growth driven by the rise in cryptocurrency prices and a surge in active users. However, the industry still faces challenges in maintaining user engagement and retention, with transaction amounts and numbers falling short of expectations.

Blockchain platforms are actively seeking growth opportunities by establishing partnerships with Web2 game studios and other content creators. Public chains are focusing on the collaborative development between games and platforms, while game developers are committed to expanding game IPs to broaden player engagement and enrich the entire ecosystem.

This report's data is from Footprint Analytics' Web3 game research page, an easy-to-use dashboard containing the most important statistical data and metrics for understanding the Web3 gaming industry, updated in real-time. You can click here to learn about the latest information on prices, projects, financing, and more.

Market Review for the Month

In February 2024, both Bitcoin and Ethereum showed significant growth. Bitcoin surged with a 46.5% increase, reaching a closing price of $62,404 at the end of the month, breaking through the $60,000 mark for the first time since the fourth quarter of 2021, coming within 9% of its all-time high. Ethereum's performance was even more impressive, with a slightly higher increase of 48.1%, reaching a closing price of $3,383 at the end of the month. Data Source: Bitcoin and Ethereum Prices - Footprint Analytics

The significant increase in the cryptocurrency market in February was driven by multiple factors. Notably, the U.S. spot Bitcoin ETF attracted a staggering $6 billion in inflows, highlighting investors' strong confidence in cryptocurrency as an effective store of value. Additionally, market expectations for the Ethereum Constantinople upgrade in March and the Bitcoin halving event in April further boosted prices. These factors collectively provided strong support for the cryptocurrency market's upsurge.

However, broader market dynamics such as inflation concerns and Federal Reserve policies may pose challenges to sustained growth. The rise in the inflation rate in February suggests that the expected rate cut by the U.S. may be delayed until later this year or even later, bringing uncertainty to the continued growth of the cryptocurrency market.

Overview of the Blockchain Gaming Market

With the strong growth of cryptocurrency, the market value of blockchain gaming tokens soared by 54.0% in February, reaching $18.5 billion.

In February, the number of daily active users (wallets) continued to climb, reaching 2.3 million, a 28.9% increase from January. The relentless efforts of the blockchain gaming industry builders successfully attracted more Web2 game studios and players to enter the Web3 gaming field, driving the rapid development of the industry. Data Source: Daily Active Users of Blockchain Games - Footprint Analytics

However, compared to attracting new users, the situation of user engagement and retention is not as optimistic. Most Web3 game developers still face significant challenges in these two areas, and according to Footprint Analytics data, the increase in transaction amounts and numbers in February fell short of expectations. Data Source: Monthly Transaction Amount and Number of Blockchain Games - Footprint Analytics

In the broader context of the Web3 gaming market, its impact on other blockchain sectors, especially in-game NFTs, is becoming increasingly prominent.

The second game, Gas Hero, developed by the StepN team Find Satoshi Lab, is a telling case. The game announced on February 28 that it would return to the closed testing phase due to significant difficulties. Despite a successful launch in January, the trading volume of Gas Hero NFT series sharply declined by 87.2% in February. This significant downward trend directly impacted Polygon and Mooar (NFT trading platforms), with their NFT trading volumes decreasing by 80.8% and 87.2%, respectively.

Public Chain Data for Blockchain Games

In February, the game rankings show that Ronin, Binance Smart Chain, and Polygon have performed well in terms of user activity, occupying market shares of 29.1%, 13.4%, and 13.1% respectively. In terms of transaction volume, Ethereum, Binance Smart Chain, and Ronin are leading, demonstrating strong market performance. Data Source: Percentage of Active Gamers on Various Public Chains - Footprint Analytics

Public chains are seizing growth opportunities through deep collaboration with content creators. Faced with local regulatory challenges, South Korean Web3 game developers are actively turning their attention to the global market to find broader development space for their blockchain games. Oasys, as a leader in this trend, not only provides a Layer 1 network but also launched a Layer 2 network based on Ethereum, offering diversified technical support for game developers. Recently, Oasys announced strategic partnerships with the well-known South Korean game developer Com2uS and the Web3 game department Metabora SG under the South Korean internet giant Kakao.

Furthermore, expanding the ecosystem through mutual growth between games and blockchain platforms is another measure for public chains to achieve growth. The Web3 game Pixels migrated from Polygon to Ronin at the end of October 2023, fully leveraging Ronin's outstanding interoperability and marketing support. This transition significantly increased the game's visibility and on-chain activity. In February alone, Pixels achieved over 1.5 million on-chain interactions, and the user count approached the 1 million milestone. This growth trend undoubtedly had a positive impact on Ronin, highlighting the mutually beneficial cooperation between the two parties.

Additionally, in February, Pixels launched the PIXEL token and combined it with "Play & Earn" airdrop activities and the Binance Launchpool reward program to further enrich the gaming experience. To reward Ronin supporters, Pixels also announced a total airdrop of 20 million PIXEL tokens to users staking Ronin RON tokens.

Overview of Blockchain Games

In February, the activity level of the blockchain gaming market remained relatively stable, with a total of 2,880 games maintaining active status. However, it is worth noting that the proportion of games with over 1,000 users slightly decreased from 8.3% to 7.9%. Despite a 28.9% increase in overall active user count, this growth did not lead to more games entering the active state, even as signs of a bull market began to emerge. This indicates that only a few blockchain games have successfully attracted a growing player base, while most games still face challenges in weak user growth. Data Source: Monthly Active Number of Blockchain Games - Footprint Analytics

Some games are actively expanding their game intellectual property (IP) to enrich their content and attract more players. The well-known South Korean mobile game developer Bali Games successfully launched the RPG game Axie Champions based on the Ronin blockchain. This game cleverly incorporates popular Axie Infinity IP elements through a collaboration with the developer of Axie Infinity, Sky Mavis, providing players with a new gaming experience. Players also have the opportunity to receive AXS tokens as rewards while participating in the game, undoubtedly increasing the game's appeal and playability.

Meanwhile, the continuous launch of new games continues to inject vitality into the market. Since its launch in February, the first-person shooter game MATR1X FIRE has rapidly attracted over 400,000 daily active users, becoming a new favorite in the market. Additionally, as a comprehensive platform, MATR1X cleverly combines artificial intelligence (AI), Web3 technology, and esports, aiming to create innovative and unique gaming products.

Investment and Financing of Blockchain Games

In February, the Web3 gaming sector continued its strong development momentum, attracting 19 rounds of financing totaling $83.6 million. This series of financing activities not only demonstrates the tremendous appeal and broad prospects of the Web3 gaming industry but also reflects investors' continued optimism and confidence in this field.

Investment and financing events in the blockchain gaming sector in February 2024

However, in the aforementioned 19 rounds of financing, as much as 89.5% of the funding amounts were below $10 million, reflecting investors' more cautious investment strategy in the blockchain gaming sector.

Several game studios and games, such as Brawl Studios (BitBrawl), Matr1x FIRE, and Pixels, have successfully secured new financing. At the same time, the game platform, as a highly anticipated sector, has also seen a number of outstanding companies emerge, such as Crystal Fun, Ultiverse, and OVERWORLD, all of which have made significant progress in their respective fields. Particularly noteworthy is OVERWORLD, which, incubated in the Xterio ecosystem, successfully secured a $10 million seed round of financing, dedicated to pioneering cross-platform RPG games.

The spotlight also focuses on the game infrastructure sector. Infrastructure providers Ready Games Network (READYgg) and the blockchain game data analytics platform Helika have both successfully completed their latest rounds of financing.

The gambling platform Monkey Tilt successfully secured the largest-scale financing in February, totaling a staggering $21 million, with participation from renowned institutions such as Polychain. This significant financing event aligns with our 2023 Blockchain Gaming Year in Review predictions, further confirming the enormous growth potential of the GambleFi sector despite facing regulatory challenges.

Key Developments This Month

• Crypto gaming company Gala Games launched the GalaSwap exchange and offered token rewards.

• Leading global digital asset trading platform LBank announced the integration of Oasys into its diverse trading investment portfolio.

• Bitcoin Cats launched the 1CAT Chain testnet to enter the blockchain gaming sector.

• Crypto gaming platform PlayDapp lost tokens worth $290 million in two attacks.

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